JAMES ASHTON: Osborne under pressure as experts predict he will have to resort to tax hikes or spending cuts to meet target of running a surplus in 2019

A criticism of George Osborne last year was that too little changed in the UK economy to merit three set-piece financial statements.

Given how much the tectonic plates have shifted since he stood up in the House of Commons on November 25, that charge is no longer applicable as the Budget hoves into view on March 16.

The Chancellor acknowledged as much last month, describing as a 'cocktail of threats' the fears of an emerging-market debt bubble and the commodities blow-out.

Now the Institute for Fiscal Studies has added its own perspective to how much harder it has become to make the numbers add up.

Trouble ahead? The Chancellor last month highlighted fears of an emerging-market debt bubble and the commodities blow-out describing them as a 'cocktail of threats'

Osborne has had good fortune in the past. Low interest rates for longer than expected have driven down borrowing costs.

In his last Autumn Statement, the Office for Budget Responsibility handily found an extra £27billion which meant he could afford to about-turn on tax credits when a shortfall in tax receipts threatened to paint him into a corner.

But the economic think-tank is concerned that the slowing global economy and a mood of uncertainty over the Brexit vote means there is a good chance that Osborne will have to resort to extra tax hikes or spending cuts if he is to meet his target of running a fiscal surplus in 2019-20.

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Osborne will be mindful of fears about household indebtedness, among other things.

Recent surveys show that the consumer was spending freely on the High Street in January after a cautious Christmas. Meanwhile, confidence in British boardrooms is on the wane.

Chancellors have failed to follow their own rules before. The welfare cap, designed to limit spending on benefit and tax credits, was breached within two years of its introduction.

But this mandate, to be tested out in official figures days before the 2020 General Election, is designed to set the seal on the financial record of a prime minister-in-waiting.

The trouble is that long-range targets don't easily mix with short-term turmoil. Tumbling equities and a shortfall in earnings both stand to slice billions from predicted tax receipts and, in turn, the slender forecast surplus.

The IFS document contains a reminder of the challenge Osborne has set himself.

It points out that the UK has not had more than three years of consecutive budget surpluses since 1952.

The fact that Osborne's mandate applies only to 'normal times' gives him some leeway.

Market watchers were reminded once again yesterday that these are still far from normal times.

Home time

Should HSBC choose to remain headquartered in Britain – as appears likely – celebrations in the City will be muted.

Rather than welcoming a favourite son back to the fold, City fathers are irked that the bank has given the impression it would rather be anywhere but here.

For the sake of his shareholders, chief executive Stuart Gulliver has made a thorough assessment of all the alternatives, with enough jet-setting to make Judith Chalmers look like a stay-at-home mum. What else would you expect from a captain of industry known for routing his pay package via Panama?

The extensive search looks to have disproved the modern-day theory that global businesses can be based anywhere.

I don't believe most shareholders would welcome a return to Hong Kong, which is not the cosy colony HSBC called home until 23 years ago and has a Chinese economic crisis brewing on its doorstep.

Few other world cities match London for critical mass and the white-collar army of accountants and lawyers.

Soon after it launched its headquarters review, a theory grew up that the loss of HSBC was a price worth paying if it meant that ministers softened their stance towards those lenders that remained in the City.

In the event, the Chancellor moved quickly to water down a levy on banks' global balances – one of HSBC's biggest gripes.

Even though the Prudential Regulation Authority is keeping institutions guessing over the final shape of the ring-fencing regime that will separate savers' cash from investment banking activities from 2019, the business environment has undeniably improved.

It might appear odd for the Government to change direction in order to keep a bank tarred by money-laundering and tax avoidance antics from flitting off.

But that is to miss the point of the need to reinforce Britain's financial services, where we enjoy a rare trade surplus.

Then there is HSBC's chunky tax contribution. There are too few of those rolling into Treasury coffers.

Yet just as Britain needs HSBC, the reverse is true.

For the bank's leaders to decide anything else would be petulant in the extreme.